CHINNEY ALLI<0385> - Announcement

The Stock Exchange of Hong Kong Limited takes no responsibility for 
the contents of this announcement, makes no representation as to its 
accuracy or completeness and expressly disclaims any liability 
whatsoever for any loss howsoever arising from or in reliance upon 
the whole or any part of the contents of this announcement.

Chinney Alliance Group Limited
(Incorporated in Bermuda with limited liability)

Placement of existing shares and subscription of New Shares
In Chinney Alliance Group Limited

Summary

150,000,000 existing issued shares of HK$0.01 each in Chinney 
Alliance Group Limited (the "Company") (representing approximately 
10.70% of the issued share capital of the Company), are today to be 
placed to independent investors by Multi-Investment Group Limited 
(the "Vendor") at a price of HK$0.10 per share (the "Placement").

The Company has also today entered into a share subscription 
agreement with the Vendor under which the Vendor will subscribe for 
150,000,000 new shares in the Company also at a price of HK$0.10 per 
share.

Placement of Existing Shares in the Company

The board of directors of the Company announces that Tai Fook 
Securities Company Limited ("Tai Fook") and Dharmala Securities 
Company Limited ("DSL") have today arranged a private placement (the 
"Placement") with independent institutions and independent private 
investors not connected with the directors, chief executive or 
substantial shareholders of the Company or its subsidiaries or their 
respective associates, for a total of 150,000,000 existing issued 
shares of HK$0.01 each in the share capital of the Company (the 
"Placement Shares") at a price of HK$0.10 per share (the "Placement 
Price"). Tai Fook has agreed to underwrite the placement of 
140,000,000 Shares and DSL has agreed to place 10,000,000 Shares on 
a best efforts basis. The Placement Price represents a discount of 
approximately 36.7% to the closing price of HK$0.158 as quoted on 
The Stock Exchange of Hong Kong Limited (the "Stock Exchange") on 
12th May, 1999 and a premium of approximately 19.2% to the average 
closing price of HK$0.0839 for the last ten days of trading. The 
Placement Shares represent approximately 10.7% of the Company's 
existing issued share capital. The Placement is unconditional and 
completion is scheduled to take place on 17th May, 1999. DSL is a 
wholly owned subsidiary of the Company. The Placees and Tai Fook  
are independent of and not connected with Chinney Investments, 
Limited, the Company, its directors, chief executives, substantial 
shareholders, subsidiaries or any associates of any of them (as 
defined in the Listing Rules). The fee payable to DSL for its 
placing of 10,000,000 Shares is 1.25% of the placement proceeds 
thereof.

Subscription of New Shares in the Company

Pursuant to a subscription agreement dated 12th May, 1999 between 
the Vendor and the Company, the Vendor has agreed to subscribe (the 
"Subscription") for 150,000,000 new shares of HK$0.01 each of the 
Company (the "New Shares"). The New Shares, represent approximately 
9.66% of the Company's enlarged issued share capital, will rank pari 
passu in all respects with the existing issued shares and will be 
issued pursuant to the general mandate granted to the board of 
directors on 30th November, 1998. The subscription price for the New 
Shares is HK$0.10 per share, which is based on the Placement Price, 
but is before placement fees and other expenses in connection with 
the placement, which are estimated to amount in aggregate to 
approximately HK$400,000.00 and will be borne by the Company.
Immediately prior to the Placement and Subscription, the Vendor and 
its associates held approximately 17.6% of the issued share capital 
of the Company. Following the Placement, the Vendor and its 
associates will reduce the shareholding in the Company to 
approximately 6.9% and upon allotment of the New Shares pursuant to 
the Subscription, the Vendor and its associates will hold 
approximately 15.9% of the enlarged issued share capital of the 
Company.

Conditions of the subscription

The Subscription (but not the Placement) is conditional on:

(a)     completion of the Placement;

(b)     the Listing Committee of the Stock Exchange granting listing 
of and permission to deal in the New Shares;

in each case on or before 25th May, 1999 (or such later date as may 
be agreed by the Company and the Vendor, provided always that such 
date will, in all event be within 14 days of completion of the 
Placement).

Use of proceeds from the subscription

The net proceeds of the Subscription amounts to approximately 
HK$14.6 million and will be used to reduce bank borrowing and for 
the general working capital requirements of the Company.

Application will be made to the Listing Committee of the Stock 
Exchange for the listing of and permission to deal in the New Shares 
to be issued pursuant to the Subscription.

Subsequent to the release of a paragraph 39.2 announcement by the 
Company earlier today, initial discussions with regards to the 
Placement commenced at around 3:00 p.m. today and the terms were 
negotiated after close of market today.

By Order of the Board
Stephen Yu Sek Kee
Director

Hong Kong 12th, May 1999